Mildura Water Corporation Appeal hosed down: Lower Murray Urban and Rural Water Corporation v Di Masi & Ors [2014] VSCA 104

The appellants

Two of the winning plaintiffs

In 2012, a jury in the Supreme Court of Victoria sat in Mildura, a small orange-picking town on the border of NSW, for 22 days (there were a further four days of legal argument) and heard a defamation case. At the end of it all, left with a list of pages of questions to answer, the jury found for the four plaintiffs, three of whom were awarded $70,000 and the other $85,000.

The defendant, who had turned down an offer of compromise where the plaintiffs said that they would accept $20,000 (in hindsight: not a good call), appealed.

What happened was this:

  • In August 2008, the Minister for Water at the time, made a decision to appoint the appellant to take over the operations of the First Mildura Irrigation Trust (FMIT);
  • The plaintiffs were on the board of the FMIT at the time
  • In September 2008, the Minister wrote a letter and addressed it to all of the former customers of the FMIT about this decision. The jury found that the letter carried the following defamatory imputations:
  1. That the plaintiffs broke the law by investing $2.2 million of Victorian Government money without Treasury approval;
  2. That the plaintiffs acted irresponsibly and outside the law by investing money loaned from the Victorian Government in the United States Sub-Prime Mortgage market;
  3. That the plaintiffs approved secret, last minute adjustments to senior management contracts in the event of the First Mildura Irrigation Trust being taken over.
  • In September 2008, the managing director of the appellant uploaded the letter onto the appellant’s website.
  • The plaintiffs argued that the letter was defamatory of them and sued the appellant.

At trial, the appellant ran several defences, including that the letter written by the Minister was “issued” by the government and was therefore a public document, within the meaning of section 28 of the Defamation Act. The trial judge rejected this argument and this was one of the main aspects of the appeal.

The Court of Appeal upheld the trial judge’s findings in virtually all respects. It agreed that the letter was not “issued”, because it was only sent to former customers of FMIT, it was not of a genuinely official nature and it was not published to the public. Therefore, that s.28 defence failed: [70].

The appellant also argued that the trial judge was wrong when he rejected the section 30 Defamation Act defence, namely that the recipients had an interest in the subject matter and the appellant had a duty to publish. That was rejected because it was held that the appellant’s conduct was not reasonable, which is required by section 30(3) of the Act.

To answer that question, it was held that the Court could look at the subjective intent or purpose of the publisher [87]. The appellant had acted unreasonably because at the time of uploading the letter, the appellant had information that showed that, contrary to the letter, the board had not invested the money borrowed from the government in the United States, and the appellant did nothing to put the plaintiffs’ side of the story.

The appellant also complained about the amount of damages, since the trial judge had relied on the “grapevine effect” in a rural community. This too was rejected.

So the trial judge was validated in virtually all respects and the appeal was dismissed. Since then, defamation judges in Victoria have always been cautious about the barristers’ trial length estimates. Fortunately for Mildura, the case was not remitted back to determine a question or two, and presuming no leave was sought to appeal to the High Court, the case has now come to an end.

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